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Vodafone Idea AGR Case: The Supreme Court clarifies that since the matter lies in the policy sphere, the government is free to decide on the next course of action.
In October 2019, the Supreme Court upheld the government’s broader definition of AGR, resulting in massive dues for telcos, including Vodafone Idea.
Vodafone Idea AGR Case: In a relief to Vodafone Idea, the Supreme Court on Monday allowed the government to review and reconcile the telecom operator’s pending adjusted gross revenue (AGR) dues amounting to Rs 5,606 crore for the financial year 2016-17. The apex court observed that the issue falls within the policy domain of the Union government, clearing the way for the Centre to revisit the disputed demands.
What The Supreme Court Said
A bench headed by Chief Justice B R Gavai and Justice K Vinod Chandran passed the order while hearing Vodafone Idea’s plea challenging fresh AGR-related demands raised by the Department of Telecommunications (DoT).
The bench noted that the petition sought to quash the additional demand for FY 2016-17 and requested a comprehensive reassessment of all dues. Taking note of the government’s 49% equity stake in Vodafone Idea and its 20 crore subscribers, the court said there was no reason to prevent the Centre from reconsidering the issue.
“Taking into consideration the status of the case now — the government has infused substantial equity into the company and that it will have direct bearing on 20 crore customers — we see no issue in the Union reconsidering the issue and taking appropriate steps,” the CJI said in the order.
The court clarified that since the matter lies in the policy sphere, the government is free to decide on the next course of action. The writ petition was accordingly disposed of.
Why Vodafone Idea Moved Court
Vodafone Idea had challenged a fresh AGR demand of Rs 5,606 crore raised by the DoT for FY 2016-17, arguing that the dues had already been settled following the Supreme Court’s landmark 2019 judgment on AGR liabilities.
Appearing for Vodafone Idea, senior advocate Mukul Rohatgi argued that the new claim was unsustainable, as it effectively sought to reopen settled matters.
The company also sought directions for a comprehensive reassessment of all dues up to FY 2016-17, in line with the government’s “Deduction Verification Guidelines” issued on February 3, 2020.
Govt’s Position
Solicitor General Tushar Mehta, appearing for the Union government, informed the bench that the Centre was willing to examine Vodafone Idea’s representation, considering its partial ownership in the company and the public interest involved.
He told the court that the government now holds 49% equity in Vodafone Idea, and the telco services over 20 crore customers, making its financial stability a matter of national importance.
“Some solution may have to be found out… If it can be kept next week, we can think of some solution,” Mehta had earlier submitted.
What Is The AGR Dispute?
Adjusted gross revenue (AGR) is the income figure used to calculate the licence fees and spectrum charges that telecom companies must pay to the government.
The adjusted gross revenue (AGR) is the measure used by the government to calculate licence fees and spectrum charges payable by telecom operators. The dispute dates back to how “revenue” was defined, whether it should include only telecom services or also non-telecom income such as rent, interest, or sale of assets.
In October 2019, the Supreme Court upheld the government’s broader definition of AGR, resulting in massive dues for telcos. The DoT later sought to collect a cumulative Rs 93,520 crore in AGR-related payments from operators, including Vodafone Idea and Bharti Airtel.
In September 2020, the Supreme Court allowed telecom companies 10 years to clear their dues, starting with 10% upfront by March 31, 2021, and the rest in annual instalments till 2031.
However, the top court also ruled that the DoT’s AGR demand was final and should not be reopened or reassessed, a stance that Vodafone Idea has sought to revisit in light of the government’s new equity position.
What Happens Next?
The Supreme Court’s order does not alter Vodafone Idea’s existing payment obligations but gives the Centre the authority to review and reconcile the company’s AGR dues in line with policy considerations.
The move could potentially pave the way for a more favourable resolution for Vodafone Idea, which has been under financial stress. Any reduction or deferral of dues could help the company strengthen its balance sheet and sustain operations amid stiff competition from Reliance Jio and Bharti Airtel.
Why It Matters
The Centre’s decision could set a precedent for handling similar disputes in the telecom sector.
It underscores the government’s dual role as regulator and stakeholder in Vodafone Idea.
For investors, lenders, and 20 crore subscribers, it signals a possible path toward long-term stability in India’s telecom ecosystem.
Haris is Deputy News Editor (Business) at news18.com. He writes on various issues related to personal finance, markets, economy and companies. Having over a decade of experience in financial journalism, Haris h…Read More
Haris is Deputy News Editor (Business) at news18.com. He writes on various issues related to personal finance, markets, economy and companies. Having over a decade of experience in financial journalism, Haris h… Read More
October 27, 2025, 16:31 IST
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